It\’s the restrictions on high-frequency trading, or HFT, that might attract the most attention. High-frequency trading uses computers to make trades at lightning speed. Firms that employ HFT say users are merely harnessing available technology to make trades, resulting in increased price efficiency. Critics say HFT leaves other investors at an unfair disadvantage and that it can be disruptive, with liquidity drying up suddenly when markets turn volatile and trading programs shut down. U.S. regulators said HFT played a role in the May 6, 2010 flash crash that temporarily sent the Dow Jones Industrial Average plunging by nearly 1,000 points.

The changes proposed Wednesday are causing predictable heartburn in the City of London. The City A.M. newspaper said U.K. Chancellor of the Exchequer George Osborne worried that there\’s a \”very real risk\” that poorly thought through EU regulations will be imposed on the financial center, warning that \”damaging the City of London would be bad for all of Europe.\”

The Wall Street Journal notes, however, that much of the fine print remains to be finalized and that some negotiators worry that the plan still leaves some pretty big loopholes. The deal was worked out between the EU Parliament and the 28 EU member states and still requires final approval by EU officials.

Back in the U.S., the HFT debate is set to continue. Securities and Exchange Commission chief Mary Jo White last year noted unease about increasingly complex \”market structure\” and said a deeper understanding was needed regarding the boom in high-frequency trading.

Meanwhile, the debate over HFT may intensify as investors await a new book by best-selling author Michael Lewis entitled \”Flash Boys,\” which is set to drop on March 31.

Publisher W.W. Norton & Co. isn\’t offering much in the way of details, but said it will give readers \”a ringside seat as the biggest new story in years prepares to hit Wall Street.\”

Story Conversation

About The Tell

The Tell is MarketWatch’s fast and engaging look at trends and themes in the day’s markets. Drawing on our reporters, analysts and commentators around the world, as well as selecting the best of the rest online, The Tell is all about the pulse of the markets through news, insight and strategic information to help you make the best investing decisions. Got a tip? Tell us at TheTell@MarketWatch.com